Monday, September 8, 2014

Business History, Shaken Not Stirred

There's a digital billboard that makes the rounds on LinkedIn every six months or so featuring wisdom from Henry Ford that looks something like this:

This quote goes right to the heart of Henry Ford's genius: He led the American consumer into the 20th century. If it weren't for Ford, Americans would still be bumping along on dirt roads in horse-and-buggies. It's the kind of disruptive innovation modern entrepreneurs dream about bringing to market. This particular quote usually elicits 20 or so "Likes" and a couple of attaboys from appreciative LinkedIn members.

The problem with the quote, of course, is that Henry never said it. (For a good discussion, see here.) One reason he likely never said it is that he would have known it to be wrong: Karl Benz was mass-producing automobiles by 1888 and many other Europeans and Americans had joined in by 1900--well before Ford began production--all with the idea of replacing horse-drawn transportation. The automobile consumer existed well before Henry Ford, even if he and she could not yet afford one of the new contraptions.

What makes this misquote especially awful, however, is that it was Ford's willful disregard of the American consumer--"if I had asked people what they wanted"--that made the sunset of his career so miserable, allowing General Motors to overtake his company and dominate the automobile industry for the next 50 years. As GM's Alfred Sloan observed, "The old master had failed to change. Don't ask me why. There is a legend cultivated by sentimentalists that Mr. Ford left behind a great car expressive of the pure concept of cheap, basic transportation. The fact is that he left behind a car that no longer offered the best buy, even as raw, basic transportation."

A better quote from Henry (so long as we are making them up) might be: "If I had asked people and really listened, I might have continued to lead the most influential corporation on earth until my death."

None of this takes away from Ford's true genius, of course. He perfected an assembly process that made the automobile affordable and eventually a necessity of life, changing the way we live and transforming the global landscape. There are certainly important lessons to be learned from Henry Ford. One of them, however, is not to ignore the customer.

From time to time there are entrepreneurs who come along who do, in fact, create a product or service that consumers simply cannot envision on their own. Elizabeth Arden moved cosmetics from the brothel to the home and (eventually) office, offering the outlandish notion that all women ought to be beautiful. Ray Kroc of McDonald's possessed a singular vision for how America should eat. Jim Clark saw things that even those working with him often could not. More recently, Steve Jobs and Apple created a series of products that we could not conceive and did not understand until we actually used them--and then they turned out to be exactly what we'd always wanted.

Someone, somewhere invented a Henry Ford quote to encourage managers to do just this--create products ahead of the customer. Since Steve Jobs and Apple actually did that, why not use a real quote? Surely, Jobs must have left us some wisdom that says what Ford tried to say: If I'd asked customers what they really wanted, they would have said bigger record albums and fatter Daytimers."

Funny enough, every six months or so, this digital billboard makes the rounds on LinkedIn:

Confused? Yep. It's precisely the opposite of what you would expect; Jobs says he led the customer by watching and listening to the customer. It's terrific advice, of course, the kind that Henry Ford could have used. And the rest of us, too.

All of which suggests that there might be better ways to get your business history and wisdom than from a digital billboard. And none of which suggests we have any chance of stopping the 20 new "Likes" and a comment or two praising Ford's genius the next time his misquote makes the rounds on social media.